SB 276-REQUIRE HEALTH INS COVERAGE FOR DIABETES CHAIRMAN MACKIE announced SB 276 to be up for consideration. SENATOR MIKE MILLER, sponsor of SB 276, stated that he was asked by members of the American Diabetes Association (ADA), in his role as Chairman of the Senate HESS Committee, to introduce SB 276. The bill requires health care insurers to provide coverage for treatment of diabetes. He noted it is rare for a Republican legislator to offer legislation that requires insurers to provide coverage, but he believes the lack of coverage for diabetes treatment affects over 30,000 Alaskans and that people with diabetes must take many actions to control their disease. He admitted that he was taken aback to learn that diabetes treatment coverage is not required. He noted his sponsor statement was in members' packets and that he and others were available to answer questions. SENATOR LEMAN commented that the issue of mandatory coverage versus mandatory offering may not be as obvious on this issue as it has been on others, but he believes people should be allowed the flexibility to choose their own health plans and the amount of coverage they want. He asked Senator Miller why he chose the approach of mandatory coverage. SENATOR MILLER replied that the legislature has mandated coverage for other things, some which he did not agree with, but he feels the legislature should go in that direction on coverage for diabetes. He personally feels that mandatory coverage is the right thing to do in this case. SENATOR LEMAN asked if early detection and education will result in decreased expenditures and save lives. TAPE 00-07, SIDE B Number 2300 SENATOR MILLER indicated that an ADA study shows an annual savings of $917 per person with diabetes when they have insurance coverage. He asked that further questions on the ADA study be directed to representatives from the ADA members. He said, as with all diseases, an early diagnosis and treatment can save more money later on. SENATOR LEMAN remarked that he saw a proposal yesterday for an upper cap on outpatient education costs and that he was told that education could take as many as six hours per year. He said he can understand why insurance companies might want to make sure that the outpatient education coverage is limited. He asked Senator Miller whether he believes that a time or dollar limit on outpatient education is a reasonable approach. SENATOR MILLER said he hopes the health care providers would be self-limiting and that he does not favor a cap because each individual is different; one may need 15 hours of education while another may need 30 hours. SENATOR LEMAN asked whether it would be reasonable for the insurers to require a person who exceeds the 90th percentile amount for education to provide documentation as to why the additional education is necessary. SENATOR MILLER replied, that on the face, that request sounds reasonable because it would only apply to the top ten percent and because requiring documentation is different than requiring a cap. He asked that those questions be addressed to the medical professionals who work with diabetics on a daily basis because they are better able to provide answers. SENATOR LEMAN noted that these issues are important to work through and that others who want to testify may want to give them some thought. CHAIRMAN MACKIE asked participants who wish to testify to limit their testimony to a few minutes so that everyone can be heard. Number 2167 CHAIRMAN MACKIE declared, for the record, that he supports this legislation but that he has a conflict of interest because his father is diabetic. MS. BETSY TURNER BOGREN, the Fairbanks District Manager for the ADA, urged committee members to support SB 276 for the following reasons. SB 276 will ensure that Alaskans have access to the medicines, supplies, and patient education that is necessary to properly manage diabetes by requiring reimbursement from insurance companies for these expenses. Regarding the concern expressed about the effect of a mandate, she is confident, after listening to testimony and reviewing the material and data provided to committee members, that legislators will be persuaded and conclude that diabetes management is different from other diseases and that this type of insurance does require a special look. MS. BOGREN said diabetes is a very serious disease that affects over 30,000 Alaskans. It is the leading cause of kidney disease, blindness, nerve damage, and lower limb amputations. It is a major risk in heart disease and stroke. The management of diabetes is substantially different from that of other diseases. Proper management is done by the patients themselves. Patients, therefore, must have access to supplies and medicines, but more importantly, to good patient education when they are going through a steeper learning curve. MS. BOGREN addressed three concerns that have been expressed about SB 276. The first relates to why the state should mandate private industry to provide coverage. She believes the answer to that concern is that the insurance industry does not behave like other industries. The patient is not the consumer. In most cases, when a patient has diabetes insurance coverage, that coverage is purchased by the employer. A patient does not have direct buying power when purchasing insurance. Also, not every employer is able or interested in learning what the needs of employees with diabetes are. Diabetes mandates have been passed in 37 states, by both Democratic and Republican legislatures, and signed by Democratic and Republican governors. No effort to repeal the law has been made in any state, suggesting that in all cases, the law has had the anticipated effect. The State of Wisconsin determined that premiums did increase by about one-tenth of one percent as the result of passing similar legislation. Another concern is that mandated coverage would raise costs and be a special burden to the small business owner in Alaska and therefore cause a disenrollment from insurance. Studies in other larger states have concluded that there has been no evidence that would result. MS. BOGREN noted committee members' packets contain copies of studies showing the cost savings associated with preventive medicine. In a study done in Maine, diabetes control resulted in 32 percent fewer hospitalizations and shorter hospital stays. In Maryland, hospitalizations and stays declined 50 percent after coverage was mandated. She correlated that when patients are able to make the daily decisions, they can respond to the ups and downs of diabetes control. They do not have to wait until they are in crisis to see a doctor and they do not visit doctors as often. Acute care is expensive and can be minimized. A Maryland study suggests that about $917 per patient per year will be saved if patients are able to manage their disease. She asked committee members to consider that if the private sector decides not to cover these costs, it may not see the benefits of long term savings from long term health care. When people with Type 2 diabetes, which accounts for about 95 percent of the patients, have health complications, they are generally in their 60's, so they qualify for Medicare and Medicaid. If the private sector will not provide coverage, the patient pays the price in the human toll, and the state pays the price in the form of Medicaid or Medicare. MS. BOGREN said the ADA is strongly opposed to capping the amount allowed for diabetes education. First, education is the foundation of this bill. Patients can receive unlimited supplies and medicine, but it will be useless unless they know how to use it. Second, the American Diabetes Association is not aware of any other legislation that caps the amount of outpatient health care that can be provided. She suggested that the insurance companies share statistics with legislators showing that there is widespread overuse of outpatient education services, if that is what they are saying. The ADA is not aware of any demonstrated overuse of the patient education system. Finally, the amount of $250 has been suggested for patient education. That amount is minimal, especially in light of the fact that the national standards for diabetes education recommend 12 hours of outpatient care. When her son was diagnosed with diabetes, it took her family about 20 hours per week for two months to learn what carbohydrate management was about. Her family needed support from occupational educators, and the people she sees in support groups need more than that. If the legislature is considering setting a cap, she hopes the cap will be no lower than the amount established by the state as the minimum standard of care. The ADA set a minimum standard at 16 hours. Number 1741 MAX BOGREN, the 11-year old son of Ms. Turner Bogren, read the following testimony. Mr. Chairman and committee members: My name is Max Bogren and I am 12 years old and I have had diabetes five and one-half years. I have to work hard to keep my blood sugar in control and manage my diabetes. Every day I test my blood sugar at least five times and I give myself three shots of insulin. I can't vary the amount of food I eat from day to day and I have to eat at the same time every day. Exercise has to be a big part of my life. Luckily for me, I was already an active kid so it's easy to just keep [indisc.] with exercise. MAX then gave a demonstration of how he tests his blood sugar and injects himself with insulin. MAX continued with his testimony as follows. On sick days, everything gets more complicated. My blood sugar is high and I need to test my urine for keytones. A couple of days ago, I saw my doctor and she thought I might want to use an insulin pump. That will take a lot of new learning. My entire life will change around and it will probably improve my blood sugar. Without all of this, I'd probably spend a lot of time in the hospital. With this expensive equipment, I'm probably going to need good insurance for the rest of my life. Please support SB 276. Thank you. CHAIRMAN MACKIE thanked Ms. Turner Bogren and Max for their testimony. He then took teleconference testimony. MS. MICHELLE CASSANO, Executive Director of the American Diabetes Association, thanked the Chairman for scheduling this vital bill. She commented that the cost of diabetes education varies with each patient. The American Diabetes Association feels there is no need for a cap on the annual education costs as there is no evidence that any abuse has been reported in that area. She pointed out that what Max Bogren demonstrated to the committee, is something that he must do many times per day. Diabetes has no cure - it is a lifelong disease and nobody gets a day off. She offered to answer questions. MS. JANEL WRIGHT told the committee she has had diabetes for 25 years. She asked each member to support SB 276. This bill will ensure that Alaskans have access to the medication, equipment, supplies and education necessary to treat and control diabetes. When people with diabetes have access to those things, they are able to self-manage their disease. Then, the complication of diabetes can be minimized and consequently health care costs for those people are greatly reduced. MS. WRIGHT illustrated the importance of access to effective treatment for diabetes with her own story. Many years ago, she entered college, eager to get her education and make something of herself. Several weeks after school started and after several trips to the emergency room, the health clinic doctor contacted her parents and recommended that she go home because her diabetes was not under control. She begged her parents to let her stay while she worked with her biology professor to control her diabetes. At that time, diabetes education was not available. She had a headache throughout her college years and did not know why. She graduated from college and went on to law school. The headaches and her vision got worse. Law school was stressful and she still did not know how to control her diabetes. The insurance plan she had did not cover the cost of syringes, a blood test machine, test strips, or education. It covered only the cost of insulin. Being a poor student, she scraped together funds to buy syringes. In 1988 she moved to Alaska. At that time, she obtained insurance that covered the cost of controlling her diabetes. She was able to get the supplies and medicine she needed. MS. WRIGHT explained to committee members that a test, named Hemoglobin A1C, shows a person's blood sugar levels for the previous three months. Right before she was able to get her blood test machine and other supplies, her hemoglobin A1C was 8.5, which means her blood sugars were about 250 or higher. Ideally, her blood sugars should be between 90 and 120. The doctor explained that is why she could not see and needed glasses. Studies show that when blood sugars are as high as hers were, the costly complications of diabetes, such as impaired vision and blindness, kidney disease, nerve damage, amputations, heart disease and stroke are much more likely to occur. She has been using a pump for twelve years and has had access to supplies and education for 12 years. The results of her latest Hemoglobin test was 5.4. This means that her blood sugar average over the past three months was 94. She attributes that level to the insurance coverage she has that allows access to those supplies necessary to control her diabetes. She no longer has to wear glasses. As a staff attorney for the Disability Law Center of Alaska, she advocates and protects the rights of Alaskans with disabilities. Many individuals with diabetes come to her office seeking assistance in obtaining social security. Due to uncontrolled diabetes, these individuals are unable to work. Many worked at one time but had no health insurance or had insurance that did not cover diabetes treatment. She believes if her insurance company did not cover the cost of diabetes treatment, she would be unable to work and would be seeking social security benefits herself. MS. WRIGHT said that 37 states have passed legislation similar to SB 276. Wisconsin was the first state to enact diabetes insurance coverage and did so in 1987. Studies in Wisconsin have shown there was no rise in insurance premiums after the law was passed. New Mexico passed its legislation in 1997, and Maine in 1996. Each of those states has reported no expected premium increases. She urged legislators to help Alaskans with diabetes to lead healthier and more productive lives by supporting SB 276. Number 1196 SENATOR LEMAN asked Ms. Wright how much it costs per year to manage her diabetes. MS. WRIGHT estimated that last year her expenses were close to $5,000 but that she also got a new pump which cost $5,595. She does not need a new pump every year. The national average is $3,500 and a lot of people cannot afford that amount. MS. BOGREN told Senator Leman that Max's expenses vary each year, but they are running about $3,000 right now. She noted that syringes are not as expensive as the pumps, but that the test strips cost about 75 cents a piece and he uses five per day. SENATOR LEMAN asked how people will pay the $600 per month for a health insurance premium if they cannot afford $3,000 per year for supplies and medicine. MS. WRIGHT said that her employer pays for her health insurance. MS. BOGREN said that is a great answer to the question Senator Leman asked earlier about the difference between offerings and mandated coverage. She noted in the states who have a mandated offering, all of the costs are reduced to the pool of people who have diabetes. For that pool, folks save by paying out-of-pocket rather than paying the high premiums. That is why the American Diabetes Association is advocating for mandated coverage rather than a mandated offering. CHAIRMAN MACKIE mentioned that Max has insurance coverage through his father's employer, but that part of Ms. Turner Bogren's mission is to look out for the people who do not have coverage. MS. BOGREN said that part of her mission is to watch out for children like Max who, when they are no longer covered by their families, will be looking for good health insurance. Her son does not want to have to move to another state that has mandated coverage when he turns 23 or 24. She pointed out that her husband asks to review his employer's coverage plans when they are up for renegotiation which occurs about every five years. Number 995 MR. HOWARD HEDGES, a resident of Homer, recounted his experience with the diagnosis and management of his diabetes. He was diagnosed as diabetic in 1991. Without knowing the symptoms, he went through the previous ten years with diabetes without being diagnosed. When he finally got to a doctor, his blood sugar was totally out of control. He was able to work with a COBRA plan for six months, but once that expired, he could not afford insurance coverage as a self employed person. While covered, he got a test machine, syringes, test strips, and insulin. After he lost the coverage, he tried to control his diabetes for two years with diet, by cutting test strips in half and by getting outdated bottles of insulin from friends. In 1993, the progression continued and he had a heart attack. Two weeks later he had a stroke that paralyzed his left side. His blood sugars were over 900 at the time of the stroke. With no health insurance, he went to Providence for five weeks of rehabilitation at a cost of $160,000. He and his health care providers are convinced that had he been able to continue to tighten down on his blood sugars, he could have avoided the stroke. Now, at the age of 44, he is on Medicaid, Medicare and Social Security. He feels fortunate to have that coverage and reminded committee members that many people do not have the desire to have a stroke so that they can have insurance coverage. He asked committee members to support SB 276 so that the advances in diabetes treatment can be taught to people. SENATOR HOFFMAN told Mr. Hedges that he was researching diabetes on the Internet and learned that only one out of three people know they have diabetes. He asked Mr. Hedges if he thought that number sounded accurate. MR. HEDGES said it does. He noted he had all of the symptoms but thought he was not feeling right because he was working hard and "burning the midnight oil." MS. DAISY LEE BITTER, a resident of Homer, related her personal experience. For 25 years, she was a teacher and principal in the Anchorage School District. She has lived with diabetes for 53 years and had insulin not been discovered, she would have died over 50 years ago. Alaska is only one of 13 states without diabetes coverage legislation. She does not like to use the word "mandatory" because she sees the legislation as a cost saving measure, as studies in other states have shown. She knows that some insurance companies are smart enough to know that if they cover supplies and medicines, they are unlikely to have to pay the high cost of emergencies, hospitalizations, and the many complications associated with diabetes. Number 658 CHAIRMAN MACKIE noted his intention to move this bill today. GORDON EVANS, Health Insurance Association of America (HIAA), stated the HIAA has opposed mandatory insurance because it does and will raise costs. Cost increases are affected by a series of mandates. Alaska has seven mandates for coverage and two mandated offerings at this time, while Wisconsin has over 40. HIAA will support the bill if it is amended to include a cap on patient education. HIAA came up with the cap amount of $250 because three states have caps: one at $100, one at $250, and one at $500. He pointed out the cap only applies to outpatient management education and training, and not to the cost of supplies and medicine. He asked how many of the estimated 36,000 Alaskans with diabetes will be affected by passage of SB 276, since many of those people may already be covered. He repeated that HIAA is opposed to government mandates but HIAA will support SB 276 if it is amended. SENATOR HOFFMAN asked when HIAA last recommended that it provide coverage. MR. EVANS replied in the 15 years that he has represented HIAA in Alaska, he has been pro-active on one major piece of legislation that passed: small employer health insurance coverage for 2 to 50 employees. He has worked with the acupuncturists to get a mandated offering, and he has worked with the chiropractors, and on the dental/vision/auditory portion of state insurance. In general, the health insurance industry supports bills when they do not mandate coverage, and that he has appeared before the legislature when such bills were being considered. TAPE 00-08, SIDE A Number 001 CHAIRMAN MACKIE said he has also opposed mandates that go up against people like Max. He personally is willing to pay more on his insurance premium if it means that other folks would have the opportunity for coverage. MR. EVANS added that the mammogram bill that passed in recent years, the prostate cancer screening bill, the 48-hour birth control - all have passed in the last five years. He had testified that the only opposition they had to the bills was because it was mandated; then they backed off and supported them. When major problems (diabetes is probably one of those) come up, it's good that they are insured so that everyone shares the cost of it, not just those who have to bear the expense. CHAIRMAN MACKIE noted that Ms. Bogren said the insurance premiums would go up around a tenth of a percent and asked if the industry had analyzed what it would do to Alaskans. MR. EVANS replied no they had not. Anytime a coverage is mandated, the insurers figure that into their underwriting. They don't use the same figures. He didn't think there was any study that would show how much a premium increases because of it. CHAIRMAN MACKIE asked the committee to review the amendment from Mr. Evans in their packets. It's on page 1, line 14, after diabetes insert, "and the insurer shall pay up to $250 for such covered out patient expenses per person per year." MR. EVANS said if there is a cap, that is only applied to the education and/or training and not to the coverage of the materials which are the most expensive. Number 250 SENATOR KELLY said he was nervous about the breadth of the language in this bill, because every time they add or mandate additional coverages, premiums do go up. It's inevitable. He is nervous about their being no caps at all and about the concept of "nutrition therapy." He didn't really know what that meant. SENATOR MILLER responded that those were valid concerns, but he had a lot of confidence in the health providers in the state and believed they would not overcharge on these issues. A couple might push the envelope, but unfortunately that happens in any profession. He thought the $250 was entirely too low. He had heard testimony of roughly around 15 hours at $100 per hour which is $1,500. This is an average and he is uncomfortable trying to stick everyone into the same box. SENATOR KELLY said he agreed that the $250 was too low, but he thought they should study the issue. Every week you read about some provider who is pulling some shenanigans like Medicaid. He thought they had some responsibility to define what is unnecessary medication and not put them in the position of billing and billing and billing. SENATOR LEMAN concurred with what Senators Kelly and Miller are saying. They ought to be concerned about costs and one of the things he's concerned about is why does an insulin pump have to cost $5,600? Why does a wheel chair have to cost $20,000? These are questions we ought to be asking. Consumers ought to be asking that rather than saying that's the price; someone should pay for it. There ought to be cost and utilization review. CHAIRMAN MACKIE called an at ease for one minute. CHAIRMAN MACKIE said there was some feelings about looking at the number more and asked Mr. Evans to continue to work with the sponsor as the bill moves through the legislature. MR. EVANS said that the language about what constitutes education and training needs to be clarified. CHAIRMAN MACKIE said that the members concurred and they would try to work and tighten it up without defeating the purpose. He asked if there was anyone with objections to the bill. SENATOR LEMAN moved to pass SB 276 from committee with individual recommendations. There were no objections and it was so ordered.